Retailers have been using loyalty programs to turn new customers into returning shoppers for years. In 2016, the consumer loyalty management market was valued at almost $2 billion. By 2023, that figure is expected to reach nearly $7 billion — an annual compounded growth rate of nearly 21 percent. In the U.S. alone, consumers now collectively hold more than nine billion loyalty program memberships.
Loyalty Programs Are Becoming Less Important
While these figures may seem tempting, the problem with loyalty programs is that they do not generate loyalty. A 2012 benchmark study from Edgell Knowledge Network, which surveyed the loyalty programs of 60 retailers, found that customers of retailers that offer a loyalty program were not recognizably more loyal than customers of those that do not.
